With one and half yards (K1.5 billion) of liquidity as measured by aggregate interbank current account balance on 28 January, the Bank of Zambia will be looking to raise K950million in treasury bills in the third auction of the year on 30 January. Will there be adequate purchasing power into this debt sale? Given the rising sovereign risks, market players will be looking for yield repricing opportunities to factor in perceived fiscal posture. Speculative traders will look for mark to market opportunities to arbitrage the secondary market pricing. The two government security T-bill sales have seen one year money ebb…
Author: The Editor
As January month end draws nigh, Zambia Statistics Agency (ZSA) is expected to announce consumer price index for the first month of the year. Given rising energy price risks braced by a fuel pump price and electricity tariff hike announced on 26 December 2019, inflation number for January are forecast to ebb 80 basis points higher to 12.5% in Tuesday 28 January announcement. A BRACE OF ENERGY PRICE RISKS. Zambia grapples with energy poverty given receding dam levels as a consequence of climate change effects. To apportion the cost of importation of power and steady supply, the energy regulation board…
With over K800million of cash flush markets into Friday 24 January debut fixed income sale for 2020, the Bank of Zambia were only able to raise K129million of the K300million on offer. Of the K354million appetite observed, only about 36% was absorbed with players preferring shorter dated 2 year paper totaling K120million at 30.95%, a 145bps repriced higher than in the 27 December 2019 government debt sale. The 7year tenor was unchanged at 25% while the 15year point repriced 100 basis points higher to 30%. The bond auction outcome outlines the risk appetite skew towards shorter dated higher yielding assets…
The week beginning the 20 January has been a studded with landmark bond issuances making headlines and headway’s in the international markets. These range from East African issuances to the Kingdom of Saudi Arabia. Closing the week will be Zambia’s first bond sale of 2020 at which it will seek to redeem last years dismal performance. Eighty million dollars’ worth on East African currency denominated bonds invaded the British market after two bonds of $40million each were listed on the London Stock Exchange – LSE earlier in the week. The ‘Aaa /AAA’ World Bank (International Bank for Reconstruction and Development…
Zambia Forestry and Forest Industry Corporation (ZAFFICO) 2020 debut listing on the Lusaka Securities Exchange (LuSE) may be delayed following an approval by Securities Exchange Commission to extend the share subscription window by an additional week according to sources close to the matter. The State Owned Enterprise (SOE) has its initial offering set to run for 6 weeks beginning 11 December 2019 to close on 21 January 2020 but will close a week further on 28 January. This is a listing targeted at raising the K329million ($23million) expansionary capital accounting for 40% of equity the state will be passing on…
Zambia Forestry and Forest Industry Corporation (ZAFFICO) 2020 debut listing on the Lusaka Securities Exchange (LuSE) may be delayed following an approval by Securities Exchange Commission to extend the share subscription window by an additional week according to sources close to the matter. The State Owned Enterprise (SOE) has its initial offering set to run for 6 weeks beginning 11 December 2019 to close on 21 January 2020 but will close a week further on 28 January. This is a listing targeted at raising the K329million ($23million) expansionary capital accounting for 40% of equity the state will be passing on…
With markets running K882million long into Thursday 16 January, the central bank in Africa’s copper producer Zambia sold K531.7million ($36.6million) worth of treasury bill assets in the second government debt sale of 2020. With an improved appetite of K665.4million compared the dismal K253million a fortnight ago, the central bank absorbed K531.7million in cash terms. Unattractive after tax rates compared to NDFs. Yields were unchanged across the spectrum save the one year that ebbed 50 basis points to 28%. Kwacha after tax yields nonetheless remain unattractive compared to Non Deliverable Forwards (NDFs) weighing offshore interest. Lucrative MTM margins vs secondary market…
Currency risks have continued to heighten in Africa’s red metal hotspot Zambia as Dollar demand builds to fund the agribusiness sector. The Kwacha has pointed north this week after most corporate resumed business this week having come from the festivity break. Having closed Wednesday 15 January at 14.55, dollar demand to fund the agriculture input sector is expected to run until April. The copper currency was earlier on the bullish streak last week as corporates geared up for mid month and provisional taxes through dollar conversions that provided support to the Kwacha. Over K2billion was mopped in tax payments that…
Divorce autopsies are usually very painful with parties involved changing strategies to survive in a jungle of opportunity. Barclays PLC divorce from the ABSA Africa operation as part of a divestiture strategy from emerging markets which were mistakenly dubbed as volatile and uncertain was one of the best things that ever happened to the local ABSA unit because it’s performance has never been so bullish. This remains a testimony that opportunity does reside in Africa which business leaders like Mizinga Melu have defied the odds within the ABSA Africa Group as its Zambian subsidiary remains one of the stellar performers…
Africa’s red metal producer, Zambia, grapples with energy price risks given rising crude prices coupled with currency bears and electricity power generation instability given receding water levels at key water bodies as climate change risks heighten. This has not only weighed manufacturing activity in 2019 into 2020 but fuels inflation which is a bigger evil as a spiral driver of interest rate risk. For 20 years running, the power utility ZESCO ltd has been in an energy marriage with Lusaka Securities Exchange (LuSE) listed power distributor Copper Energy Corporation (CEC Plc) whose major client has been the mines. The bulk…